Lessons learned from Colorado’s 4/20 marijuana sales: Q&A with The Clinic’s Zach Engel

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Colorado’s cannabis retailers are preparing for what could be a record day of sales on Saturday, April 20, the unofficial marijuana holiday dubbed 4/20.

It’s the first time since the Centennial State kicked off recreational sales in 2014 that the 4/20 holiday has landed on a Saturday, which is expected to generate even more purchases.

Zach Engel, inventory manager for The Clinic, a vertically integrated marijuana business with four retail locations in Colorado and two in Illinois, shared with Marijuana Business Daily how he prepares for 4/20 and some of the lessons he’s learned in the past five years.

When do you start preparing for 4/20?

We produce 90% of the flower and concentrates that we sell, so the forecasting starts six to seven months in advance.

We increase the number of plants we put in the ground in September so those are ready to make into concentrates come March and (to) have as dry flower in April, because we want those products to be fresh.

On the concentrates side, we increase production in February and March and really push processing and packaging in March and the beginning of April.

A lot of wholesale orders for our 350 retail partners come in early to mid-March. The first week or two of April we’re pushing 50%-70% more orders out the door to get them to our clients in a timely fashion.

In terms of ordering from other vendors for edibles or other products, I’m usually talking to them in early to mid-March to understand what their plans are for specials they’ll be running and what they’re planning to do to partner and support our retail operations.

I’m putting those orders in early to mid-March with delivery dates in early April.

How do you store the increased inventory?

It goes directly to the retail locations for our operations.

When you’ve already increased 75%-100% of your normal inventory, finding space is crucial, so we keep a reserve at our manufacturing and grow facilities. It’s ready to go; so, if it’s needed, you can make the call and it’s on its way.

The biggest lesson I’ve learned is to always add an extra 10%-15% of products to the already-increased projections and have a 20% reserve stock, so if you sell out, you’re able to restock those shelves on the fly.

When do you see an uptick in 4/20 sales?

Throughout the month of April we see a 15%-20% increase in sales. That starts about two weeks leading up to 4/20. We try to run promotions all of April to alleviate the traffic for the days around 4/20.

That way, we allow customers and patients to get a head start and not have to deal with long lines or long ticket times the day of or days before.

Medical patients don’t like long lines or lack of attention, so we give them the opportunity to come at the beginning of the month or end of the month and get the same promotions. Then they’re not desperate to come shop on 4/20.

For us, it alleviates some of the pressure on our staff. We’re able to open up additional registers for recreational sales because we know our medical patients are taken care of, and that helps ticket times.

Then, our staff isn’t feeling as rushed to get people in and out the door. That’s been a crucial part of this holiday celebration.

What data are you analyzing to make inventory purchasing decisions?

I use BDS Analytics to forecast. It’s an invaluable tool for me to identify the current trends and products in category sales.

Another great thing is now we have four years of recreational sales data, so it’s getting easier to predict traffic patterns and volume increases because now we have a better understanding of recreational trends.

How do 4/20 sales compare with other holidays?

It’s a big day and a big weekend for us. But Labor Day weekend has historically been our best couple of days year over year.

The week between the Fourth of July and 7/10 are big, too. Fourth of July is huge for occasional users, and 7-10 is huge for concentrates users.

What products do you predict will be big sellers this year?

4/20 is a huge joint day. A lot of users are looking for a one-time-use product. We see about a 150% increase on joints alone during the 4/20 holiday.

Vape pens are going to be up about 120% in sales. We’re also doing a lot to promote vape pens this year.

Another big trend I’m seeing in the market overall that I’m hoping to see (at The Clinic) is a 90%-100% increase this year on the low-dose or microdose edibles – the less-than-5 milligram or less-than-10 milligram single-serving edibles. We’ve seen a 50%-60% increase on those products alone this year.

The other big one I’m seeing this year is CBD products, whether it’s a CBD vape pen or CBD edible. I’m looking for hopefully 70%-80% increase in those sales.

How do sales look the week after 4/20?

In general, seven to 10 days after any large promotion we see about a 15%-20% decrease in sales. To combat that, we try to target our core customers with comeback coupons.

For example, if you spend $50 or $100 on the day of the promotion, you’ll get 25% off your order if you come back in the next seven to 10 days. That helps keep the momentum going.

It also builds the average ticket sale on the day of the promotion. We’ve seen that strategy curb 5%-10% of the falloff after the promotion.

This interview has been edited for length and clarity.

Joey Peña may be reached at joeyp@mjbizdaily.com